Saving Washington: The case for a wealth tax

Several businesses in the Pike/Pine area of Capitol Hill have boarded up their windows and doors in response to COVID-19. (Dorothy Edwards/Crosscut)

Mike McGinn is a former mayor of Seattle.

Our first priority must be stopping the coronavirus. But when we do, we will face the greatest fiscal disruption of our lifetimes. People in need, businesses shuttered and state and local governments severely limited in their ability to respond. I oversaw the Seattle budget — dealing with the worst effects of the last recession — from 2010 to 2013, and this is more dire.

State and local governments can’t print money — and don’t hold your breath that Trump and the Senate will print enough for blue states and deeper blue cities. Even Obama couldn’t. So do we cut health and human services, emergency services, senior centers, parks and community centers? Do we stop maintaining bridges, roads and buildings?

Another terrible alternative is reaching for the tax sources that have given our state the most regressive tax system in the nation. Hitting low income workers and struggling small businesses with harsh taxes is no way out of a recession.

In other words, we can tax personal property, the stuff you can move around like yachts and hedge fund investments, just like we tax real property such as land and buildings. In fact we already tax the personal property owned by businesses, but the legislature exempted things owned by individuals such as stocks and bonds. They can reverse that.

We could make it fair by having a healthy household exemption — taxing only assets over a certain amount — so that only the relatively well-off pay.

Nobody likes new taxes. But this is a crisis and we should not be burdening those with the least by cutting essential services or raising regressive taxes. Time for the wealthy to step up.